The vast majority of healthcare executives plan to pursue mergers and acquisitions (M&A) by the end of the year, according to a recent survey from GE Capital Healthcare Financial Services.
Eighty-eight percent of the 223 senior healthcare executives surveyed said M&A are on the horizon, while 43 percent reported they will pursue refinancing and 36 percent anticipated recapitalization as part of their growth strategies, the survey found.
Seventy-two percent of executives said they anticipate their businesses performing better compared to the last few months, while only 4 percent believed they would perform worse and nearly a quarter believed they would perform the same, according to Senior Housing News.
However, 37 percent expressed concern over the looming possibility of a government shutdown; 30 percent were worried about Affordable Care Act changes as the reform law is implemented and 26 percent had concerns about regulatory scrutiny. Only 8 percent of respondents are worried about their access to financing when it comes to the future of their organization.
Although healthcare-related deals grew quickly in both number and value in the second quarter of this year, these transactions were mostly limited to a small number of hospitals, according to a recent American Hospital Association survey. Between 2007 and 2013, only 12 percent of hospitals were involved in a merger or acquisition. However, an April survey found 60 percent of healthcare execs said they planned to make more deals in 2013 than in 2012, FierceHealthFinance previously reported.
The emerging trend toward mergers and acquisitions is largely in response to financial struggles in the industry, according to Darren Alcus, president and CEO of GE Capital, Healthcare Financial Services. "Companies are seeking ways to grow in a challenging environment," Alcus said in a statement. "Decreased utilization, reimbursement rates under constant pressure and increased regulatory scrutiny have made it difficult to grow organically, so we're continuing to see companies turn to M&A."
To learn more:
- read the GE statement
- check out the Senior Living News article